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Ripple Co-Founder Proposes Alternatives to Proof-of-Work Model to Make Bitcoin More Sustainable

With the emergence of cryptocurrencies into mainstream finance and as a viable asset class, many industry experts have addressed the issue of sustainability, and how the current Bitcoin network can

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With the emergence of cryptocurrencies into mainstream finance and as a viable asset class, many industry experts have increasingly addressed the issue of sustainability, and how the current Bitcoin network can be tweaked to achieve better energy efficiency.

While many industry leaders have increasingly resorted to a proof-of-stake model, which offers better energy efficiency and scalability, some still run on the conventional proof-of-work model, the underlying consensus mechanism behind Bitcoin.

Ripple co-founder Chris Larsen addressed this and said that it might be problematic, especially with the way in which Bitcoin has been appreciating and gaining popularity. A switch to a proof-of-stake model or a Federated Consensus would be an essential move for Bitcoin if it wishes “to remain the world’s dominant cryptocurrency,” said Larsen.

In a blog post on Medium, he wrote:

“While many newer cryptocurrencies are already low consumers of energy or even carbon-neutral, Early protocols such as Bitcoin use a core technology called Proof-of-Work (PoW) to validate transactions, which is not only a huge and growing source of CO2 emissions but also uses massive amounts of energy, both from fossil fuels and ‘green’ sources.”

Larsen goes on to remind the crypto community that Bitcoin has significantly grown since its inception in 2009. Currently, according to the Ripple co-founder’s research, Bitcoin alone consumes an average of 132 TWh a year, which is equivalent to roughly 12 million US homes’ energy consumption. Annually, it releases an estimated 63 million tons of CO2, and of coins running on a proof-of-stake protocol, Bitcoin accounts for 98% of the hashrate.

Meanwhile, in a bid to achieve crypto sustainability, Ripple follows a federated consensus model to validate its transactions and conduct cross-border payments with XRP.

Recently, the fintech firm has also joined the Crypto Climate Accord, an initiative comprised of crypto industry figures such as ConsenSys and CoinShares, to further the conversation on how to develop solutions that enhance sustainability and scalability in the crypto sector, all the while creating value.

According to a previous Ripple blog post, XRP was “designed with sustainability in mind,” and the fintech firm asserts that the cryptocurrency is inherently green. Unlike Bitcoin, where there is a maximum supply to be mined, all XRP is already in existence, meaning no additional mining processes – which require energy consumption – will be needed to produce more.

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Source: https://blockchain.news/news/ripple-co-founder-proposes-alternatives-proof-work-model-make-bitcoin-more-sustainable

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Ethereum Gas Fees Surge to a Monthly High, Supply on Exchanges Continues to Decline

Ethereum’s total fees has hit a monthly high of 746.026 ETH.

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After hitting highs of $4,350 recently, Ethereum (ETH) retraced to $3,871 at the time of writing, according to CoinMarketCap.

The crypto market experienced shock waves after Tesla, the American electric car manufacturer, decided not to accept BTC payments, citing concerns of negative environmental impact.

The Ethereum network has enjoyed notable milestones ever since the second-largest cryptocurrency breached the previous record of $1,400 set in 2018.

For instance, the total fees paid hit a monthly high of 746.026 ETH, as acknowledged by on-chain metrics provider Glassnode. Moreover, ETH’s dominance reached a record high of 19.13%.

Ethereum’s supply on exchanges continue to be depleted

According to market analyst Joseph Young:

“The supply on exchanges continues to nosedive. Feels very different from the last bull cycle.”

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Glassnode had previously reported that ETH on exchanges dropped to 12% of circulating supply, as Ether in smart contracts rose to 22.8%.

CryptoQuant CEO Ki Young Ju attributes this trend to Ethereum’s usability and ecosystem, which has made ETH holdings decrease both in derivative and spot exchanges. As a result, the sell-side liquidity crunch has been intensified.

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Crypto addresses with at least 10,000 ETH hit ATH

Lex Moskvoski, the CIO at Moskvoski Capital, noted that crypto addresses with more than 10,000 ETH broke the record in the last 30 days. He explained:

“Number of Ethereum addresses with more than 10k ETH are repeatedly hitting ATH in the last 30 days. Looks like the beginning of massive accumulation. Smart contracts are excluded in this chart.”

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Furthermore, decentralized finance (DeFi) projects on the Ethereum network has expanded at an incredible rate, absorbing more than $100 billion in liquidity in less than a year. Ethereum smart contracts are one of the most sought after features in DeFi.

Time will tell whether ETH will hit the psychological price of $5,000 this year, given that Ether has enjoyed a remarkable bull run in just the first quarter of 2021. Many are inclined to think that Ether will eventually reach $5,000 in value. Dallas Mavericks owner Mark Cuban seems to think that Ethereum will dwarf Bitcoin in the future, given the reliance of other blockchain projects on its network.

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Source: https://blockchain.news/news/ethereum-gas-fees-surge-monthly-highsupply-exchanges-continues-decline

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Bitcoin Struggles to Maintain Its Dominance

Bitcoin’s dominance has fallen to 44%, which is the lowest level BTC has gotten since 2018.

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Bitcoin’s consolidation continues. Ever since the top cryptocurrency hit highs above $64,500, it has not been able to breach the $60K price level. Last month, Bitcoin even plummeted to lows of $48.5K.

This downtrend was triggered by speculations that the American administration would increase capital gain taxes, which would affect crypto investments. Bitcoin is trading at $55,179 at the time of writing, according to CoinMarketCap.

The lack of an upward momentum has been partly triggered by Bitcoin’s dominance falling to 44%, which is the lowest level BTC has gotten since 2018, as alluded to by market analyst Holger Zschaepitz. He explained:

“Crypto market value hits $2.5tn as Ether hits record high >$4k. Bitcoin’s price is currently ~$59k w/its dominance reaching 44%, lowest since 2018, while Ethereum’s dominance is at a record 18%.”

Despite Bitcoin’s dominance falling, Square Inc. recently announced a BTC revenue of $3.51 billion during the first quarter of 2021, which is an increase of more than 11 times over the same period last year.

Institutions bought the recent Bitcoin dip

According to Glassnode co-founders Yann & Jan, panic selling by retail investors caused Bitcoin to plummet. They said:

“While retail investors panic sold, institutions bought this recent Bitcoin dip.”

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They had previously said that new market entrants caused the recent BTC panic selling, which saw the cryptocurrency’s price nosedive to the $48K level.

Bitcoin whales are, therefore, in an accumulation mood, as noted by Santiment. The on-chain metrics provider explained:

“Of the 16,104 Bitcoin addresses holding between 100 to 10,000 BTC currently, they own 9.1M BTC ($531.3B in USD). After declining holdings from April 10 to May 4, this group is showing signs of accumulating again with 20k added BTC the past 2 days.”

On the other hand, Bitcoin’s selling pressure from miners has fallen, as stated by a crypto trader tweeting under the pseudonym “Crypto Baby.”

“BTC selling pressure from miners is dead. They sent a large amount of BTC to exchanges in Feb this year, but they are moving a relatively small amount of Bitcoins these days. The sellers today seem not long-term investors and miners, but short-term profit takers.”

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Although Bitcoin is eyeing the $60K price level and has been struggling to retest it, 2021 has still proven to be a record-breaking year for BTC.

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“Crypto market value hits $2.5tn as Ether hits record high >$4k. Bitcoin’s price is currently ~$59k w/its dominance reaching 44%, lowest since 2018, while Ethereum’s dominance is at a record 18%.”

Source: https://blockchain.news/news/bitcoin-struggles-maintain-its-dominance

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Kazakhstan Launches Public Consultation for Its Proposed CBDC

Kazakhstan is advancing its digital tenge project with a use case design and stakeholder consultation.

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The National Bank of the Republic of Kazakhstan (NBRK) is set to launch a public consultation for its proposed digital tenge currency, the nation’s official Central Bank Digital Currency (CBDC).

As detailed by the NBRK, the development of the digital tenge will take a two-tier structure in which the apex bank will provide the infrastructure backing the CBDC rollout while the financial market participants will provide payment services.

The development of the digital tenge according to the NBRK will seek to serve as a complement to the fiat currency, and not as a replacement.

“National digital currency is a promising form of funds that are the obligation of the National Bank of the Republic of Kazakhstan and presented in digital form. The digital tenge will be a legal tender, a measure of value, and a store of value,” the bank said in its public announcement.

To make for a successful digital tenge, the NBRK has highlighted the need to consult relevant stakeholders by working together with financial market participants, the expert community, and international partners. The pilot test will be kickstarted with the study of the risks and benefits associated with the issuance of a digital tenge in the nation.

“To make a decision on the issue of the Digital Tenge, it is necessary to conduct a comprehensive study of the benefits and risks with the definition of the tasks solved by the digital currency, the method of its emission and distribution, the technology used, the impact on monetary policy, financial stability and the payment ecosystem,” the NBRK noted.

Kazakhstan has been a very bullish nation when it comes to digital currency innovations, adequately nurturing plans to attract as much as $738 million in crypto-based investments over the course of three years. The country also has a dedicated crypto mining engagement, for which it plans to invest $700 million.

The digital tenge project is a development that models similar efforts by other advanced economies including the United States, Britain, and China, to name a few. Kazakhstan has no set deadline on CBDC issuance.

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Source: https://blockchain.news/news/kazakhstan-launches-public-consultation-its-proposed-cbdc

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